What is input tax credit and how do I claim it?

Name: Vijay R Singh & Co.
Address: Office No. 4, Vishal CHSL, D Wing, Sir Mathuradas Vasanji Road, Azad Nagar, Opp. Andheri Gymkhana, Andheri East, Maharashtra, 400069, IN
Telephone: +91 98607 23959

CA Vijay R Singh, FCA
Chartered Accountant · ICAI M.No. 153926 · FRN 136869W

Short answerInput tax credit (ITC) is the GST you pay on business purchases, which you set off against the GST you collect on sales — so you pay tax only on your value addition. You can claim it if you have a valid tax invoice, the supplier has reported it (it shows in your GSTR-2B), and you pay the supplier within 180 days.

How ITC works

GST on purchases reduces the GST you pay on sales, so you’re taxed only on the value you add.

Conditions to claim

Valid invoice, the credit appears in GSTR-2B (supplier filed), goods/services received, and payment to the supplier within 180 days. Claim within the time limit (by 30 November of the next year).

GST

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This answer is general information for businesses, not tax advice. Tax rates, thresholds and forms change with each Finance Act — please confirm the current position for your own facts, or speak to us, before acting.